7 Benefits of Business Financial Control for Your Business

 Have a good idea. Think about starting a business of your own. Build your business. Develop an excellent product or service. Hire employees. Grow up. This is the perfect roadmap that every entrepreneur dreams for his life.

But we know that in the midst of all these steps there are a number of factors that need to be taken care of to get to the last point. One of the most important is corporate financial control.

According to the report Global Financial Stability, made by the International Monetary Fund (IMF), the level of indebtedness of Brazilian companies is among the highest in emerging countries.

Given this scenario, the benefits of this control become even more essential. After all, it is he who will give an overview of your company, pointing out problems and indicating the best decisions to be made to reach the solutions.

In this article, Sir Anthony Absolute will show all the benefits of business financial control, as well as important concepts and information for your business to go further and further.

What is corporate financial control?

What is corporate financial control?

Any company that wants to survive the first few months of life or wants to stay active for many years, needs to control their finances very well.

It is no news to anyone that the expectation is always to make a profit. Therefore, it is extremely necessary to know precisely all the factors that, when added, will reach this result.

Corporate financial control is the tool that will show you where you can invest your money, what expenses or revenues are frequent, and where exactly every cent is generated by your business. With it, you have a complete look at some important information such as:

  • Operational costs
  • Wages and benefits of employees
  • Products that make a profit
  • Damaging Products
  • Budget planning
  • Bills to pay
  • Bills to receive

Benefits of Corporate Financial Control

Benefits of Corporate Financial Control

Making important decisions is never an easy thing. When it comes to companies, mainly. If you go the wrong way, the result can be catastrophic.

How about having a partner at those times? Corporate financial control helps in your choices and brings more security to your day to day.

1. Tranquility in management

The first and great benefit sometimes is not even noticed. By performing a good financial control business, you keep your business running, with your bills up and well targeted investments.

All this allows you to have the peace of mind needed to make the best decisions to run your business. Nobody likes to take important steps with the rope around their necks, does not it?

2. Cutting expenses

You make a list every time you go to the grocery store, right? If you’re spending too much, you’ll need to review your purchases. With corporate financial control, so too.

You can put all your spending on paper, identifying the superfluous, the unnecessary, and the need to be revised to realize that it can be crucial for the bill to hit at the end of the month.

3. Forecasting for the future

We’re not talking about crystal ball! The corporate financial control allows setting short, medium and long term goals, defining a budget for each of these periods.

Thus, it is possible to design new investments for tomorrow, growing in a structured and planned way, through actions such as the opening of channels of action or the diversification of its lines of products or services.

4. ROI Planning and Tracking

ROI, or Return on Investments, is the ratio of the money you have earned or lost on an investment. With corporate financial control, it is possible to evaluate the ROI of a particular investment in advance to determine whether or not it is worth doing.

After making the investment, you can also track your performance if the return is as expected, correcting routes if necessary.

5. Recruitment or dismissal of staff

What are the costs to increase your team? And what are they otherwise? Hiring and firing is part of every day business. But with corporate financial control, it is possible to carry out these actions in a more structured way.

With it, you can gauge whether your cash flow allows you to afford a new employee – taking into account all costs like INSS and FGTS – plus the impact on your pocket of a contractor’s termination.

6. Definition of the selling price

Mapping your competitors and investigating how each acts in your market are the basic actions to set the selling price of your product or service.

But there are other factors, such as the Contribution Margin Projection and the Point of Balance Projection, that good corporate financial control will help you to do. They are important information to make the calculations necessary for your projections.

7. Collaborative budgeting

A good corporate financial control helps in the accomplishment of an action done by several institutions and that brings excellent results: the collaborative budget.

Basically, the collaborative budget allows each sector of the company to mount its budget proposal, justifying the need for the values, negotiating with the board its approval.

Thus, everyone comes to understand the impact of their actions on the end result of the business.

Many companies divide a percentage of what is saved as a way to motivate teams and encourage people to carry out their activities with a common goal and in a more conscious way.

Enterprise financial control allows you to understand the feasibility of the budgets presented, as well as the return that the sectors of your business have given from what is invested in them.

Want to go deeper into the subject? Sir Anthony Absolute explains in this article what you need to know to do your business financial control.

If you also want to have a good management of your personal financial life, here we explain why you should use a manager for this.

Corporate financial control is a broad and detailed subject. So if you have any questions, let’s talk! Leave in the comments just below.

 

 

Is Pensions Better Than Savings For What Reasons?

Is Welfare Better Than Savings?

Savings are Brazil’s best-known investment modality. However, in recent years, many people have been opting for private pension. Is a pension plan better than saving?

Thinking about the future

Thinking about the future

Life is not easy for anyone, and we do not know what will happen in the years to come. Therefore, it is fundamental to start planning in the sense of having some guarantee in the future.

Recent news about the gap in the public pension system in Brazil throws some uncertainty about the workers’ retirement.

There is a concrete fear that the system will break, leaving poor beneficiaries who have contributed for many years to come.

Because of this, the option of investing in savings or a private pension plan has become attractive to the population. Mainly as an alternative to social security.

But which is better?

To know whether foresight is better than saving, or the opposite, we will analyze each one separately.

Savings: popular, practical and little paid

 

For a long time, savings accounts represented the preferred form of investment for the average Brazilian.

The great attraction of this investment is its practicality. The person can redeem the money from the savings at any time, without the incidence of income tax.

In addition, the FGC guarantees the reimbursement of up to R $ 250,000 for the holder of the book in the event of any problem with the bank.

This means that, up to the amount above, the money in the savings is safe even if the bank goes bankrupt.

As for income, the savings yield a maximum of 0.5% per month, which results in just over 6%.

Welfare: long-term forced savings

Welfare: long-term forced savings

Unlike savings, private pension plans do not have a FGC guarantee.

In addition, to make short-term redemptions of a pension plan, you will have to pay high fees.

Another disadvantage is that private pension plans are subject to Income Tax, in both progressive and regressive models.

If you do not have the discipline to make monthly applications, the pension plan is committed to pay monthly.

Is Welfare Better Than Savings?

Is Welfare Better Than Savings?

Comparing the two types of investment, we can conclude that, in general, a pension plan is better than saving.

Savings income is often below inflation. The profitability of private pension plans varies according to the plan, but usually exceeds that of savings. Even with the incidence of taxes.

Of course, in case you opt for social security, try to research and choose a known and trustworthy institution.

+ Which to choose: CDB or savings?

If you live with the possibility of suddenly redeeming the money applied, in an emergency, the savings may still be attractive to you.

Consider investing in a fixed income application. There are several options in the market, with profitability of approximately 11% per year, and guaranteed by the FGC.

The savings have already had their glory days, but they belong to the past.

Now that you know a little more about social security, see also how to do your children’s welfare.